Whether you become a sole trader (ie are self-employed) or set up a partnership or limited company, starting your own business is relatively simple, quick and inexpensive, which partly explains why so many people continue to do it. Last year, a record-breaking 581,173 new businesses were registered at Companies House. Per capita, more new businesses are started in the UK than in the USA.
However, the survival rate for new businesses remains low. About half of all new UK businesses fail within three years and 90% are gone within 10 years. And only 4% of start-ups achieve a million-pound turnover after three years. For those who survive the three-year test, achieving significant growth remains a huge challenge, with many small firms staying more or less a similar size.
Some small businesses are restricted by business models that can't be scaled, while others are run by people who simply don't have the know-how, experience, drive, vision or leadership skills to grow a business. Some businesses fail to attract the right people or find the right strategic partners to enable growth.
For most businesses, organic growth by reinvesting profits will only take you so far, usually at a much slower pace. Without doubt another reason why some small businesses fail to grow is lack of funding.
If you really want to take your business to new heights, external investment or funding can unlock the door. I co-founded ezbob in 2012 and since then funding from institutional investors and the UK government-supported Angel CoFund has enabled us to grow our business so that, alongside our sister company, Everline, we've now provided more than 6,000 business loans and lent more than £60m to fellow UK small businesses.
Business angel or private equity investment might not be available or preferable (not everyone wants to concede ownership or control in exchange for investment). Grants from public sector organisations exist, but they're few and far between.
You might think you could turn to your bank for a loan to help fund your growth ambitions, but there are no guarantees your application will be approved. That's partly why 'alternative sources' (ie not from banks) now supply 25% of lending to UK SMEs, according to an FT.com report in February, which also said that many smaller businesses are discouraged from applying for bank loans as a result of previous rejections or the cost implications.
The most suitable business growth funding option for you will be determined by how much money you need, when you need it, your turnover, whether you're prepared to put up any assets as security or concede any ownership or control. These are all key considerations.
Trying to grow a business inevitably involves some risk and it takes time and a lot of hard work, but the results can make it worthwhile. Above all, you need to ensure you get the funding you need to match your circumstances and ambition.
Understanding your own value is the first step to charging what you're worth. To do this, you must reflect on your expertise, which consists of your professional qualifications, continual professional development and experience.
It's very difficult for you to see how valuable this is, because you take it for granted, you've done it for years. This is called being "unconsciously competent". You do things automatically without thinking that much and therefore don't place much or even any value on it.
You must review this regularly because, as you continue to develop your skills, you become even more competent and probably faster, so if you're charging for time, you could actually be losing revenue.
What are their problems? To find out, ask them key open questions (ie ones that can't be answered with a simple one-word answer). Begin your questions with 'what', 'where', 'when', 'how', 'who' or 'why' then let them answer without interruptions, prompting or leading.
Find out what "pain" they are experiencing and how extreme it is. The greater the pain, the more likely they are to use your services and pay you what you're worth. You need to find out what solving the problem will be worth to them and cost them if it's not resolved.
Self-worth is at the heart of everything we do and it drives our behaviour. Humans are motivated by pleasure or pain. We either move towards pleasure or move away from pain. In a business context, if you don't feel 100% worthy, how can you possibly charge what you're really worth?
If someone tells you to raise your fees, it makes you feel uncomfortable and you move away from whatever is causing that discomfort. You stick with the fees you currently charge – even if that means not getting paid what you deserve.
If you focus on price, so will your clients. If you don't first demonstrate the value of what you do, prospective clients will likely regard the quote you give as high, no matter what price you offer.
You have to get them to shift from looking at the price to seeing the value of it. Once they understand the value, the price you quote will actually seem relatively low.
By ensuring customers know exactly what they'll be getting for their money, they're much more likely to do business with you and pay you what you're worth. Very often people fail to communicate their value effectively, usually for three reasons: they don't understand their own value; they make assumptions about the client's understanding of the value; or thirdly, they're uncomfortable doing it.
Many people are uncomfortable talking about money, quite simply because they have negative beliefs about it, such as the following:
It's likely that these have become embedded in your subconscious mind, they've become beliefs and are therefore negatively impacting on your thoughts and actions around money. So it's imperative that you change your beliefs about money, otherwise it will be impossible to charge what you're worth.
Take the first step to charging what you're worth by ordering your complimentary copy of my book, True Worth.
Copyright © 2015 Vanessa Ugatti – The True Worth ExpertTM.
You have an awesome product, but now it's time to scale. Other than word of mouth, how are you planning on bringing users to your product? If your answer is 'I don't know' or 'the subscribers' list' you might be in trouble. But don't fret; these quick tips that many start-ups ignore will help boost your growth without taking too much time out of your busy day.
These may sound simple, but working at a company that lists web apps, you'd be surprised at how many of the start-ups we work with that fail to abide by these maxims. If you follow them, the customers will come.
Years of experience in coming up with business names has led me to develop these 12 questions I use to filter my shortlist. It's rare that more than one potential name makes it past each one, but when it does, I'm pretty confident it's a winner...
Short is good, but remember, brevity isn't just about character count, it's more to do with syllables. So, a five or six letter name is great, but an eight-letter name with just two syllables is nearly as good.
Pass: Eight letters or fewer; two or three syllables.
Fail: More than eight letters; four or more syllables.
Is the name easy to pronounce? If the pronunciation isn't obvious, people will struggle to remember it or pass it on. And if it's awkward, you'll soon get fed-up repeating it 20 times a day when you answer the phone.
Pass: Sounds great, looks great.
Fail: Looks better than it sounds.
There's a fine line between weird and wonderful. We're all pretty comfortable with a name that breaks a spelling rule, so using a K instead of a C can work. But if potential customers can't spell your name, they can't search for it online. And if your brand name is too strange, it becomes distracting.
Pass: You won't find it in the dictionary.
Fail: It combines letters as never before.
Not everyone shares your sense of humour, so if you want to be taken seriously, avoid puns.
Pass: It's a credible name.
Fail: It only makes you laugh.
Many businesses are just initials, right? And your business name could even be a phrase or sentence, acronym or combination of numbers and letters. Resist the temptation. Such names might seem good idea at the time, but the attraction can fade in time.
Pass: It's one word.
Fail: It's never b33n done b4.
Coining entirely new words is full of branding potential, but make sure you check for ambiguity and translation risks (the internet is full of names that seemed a good idea in English, but were hilariously obscene in Spanish or French).
Pass: It's unique (or unique-ish).
Fail: It sounds rude in German.
You can't build a brand out of a purely descriptive name, but hinting at the nature of your business is a good idea. Does your potential name give your target customers an idea about what your business does, its strengths or its benefits?
Pass: It feels right for your type of business.
Fail: It's totally random or blandly descriptive.
Do some basic online checks to see if the name is taken. Don't mistake this for uniqueness: even if you've coined the name yourself, you're unlikely to find a pronounceable word that's not used somewhere in the world. But you need to make sure it's not used by a competitor, that it won't confuse your customers – and you won't be sued next year. Check for registered trademarks in your country or region.
Pass: It's pretty unique – Google reveals nothing of concern.
Fail: 200 pages of search results. Some very similar registered trademarks.
Most people will assume your web address is www.[your business name].com. Despite growing alternative suffixes (eg .ly or .io or the newer not-com domains like .pizza and .food), a .com address confers authority and avoids confusions. Don't use hyphens to create a domain name that's available to register. Don't compromise.
Pass: The .com is available to register or buy.
Fail: You can only get a compromise domain suffix.
Is it a business name or product name? Does it refer to a location or service? Even if you're fully focused on the here and now, you may regret being overly specific when you want to develop later one. And if your business name is your own name, will it still feel right when you grow into a larger business? Think about the future.
Pass: The name is open to interpretation.
Fail: The name limits your options.
'Stickiness' is hard to define, but at its heart are differentiation and engagement. If your proposed name sets you apart, it will help you stand out. And if it's engaging, it will connect with people on a human level – it will be likeable and feel relevant, and be more memorable as a result.
Pass: It's a bit different, but feels right.
Fail: It's OK, but a little dull, descriptive or generic.
Trust yourself. If there's a name which you keep coming back to that sets your pulse running or makes you just a little bit nervous and it passes the above tests – go for it. Don't listen to friends and family - they're likely to tell you what they think you want to hear or go for the safe option. Successful brands take risks.
Pass: It's the bold choice.
Fail: It's the safe choice.
Copyright © 2015 Dave Clark, a creative branding consultant with 20 years' experience working with start-ups and large corporates. He is co-founder of Novanym.com (the "brand name store").